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The review - and how it worked

As part of a review into Surrey Pension Fund’s asset management arrangements and its passive and active equities, financial consultants TruCost were brought in to look at the risk climate change has on people’s pensions and analyse what impact investing in companies such as BP and Shell has.

Their methodology did not include oil that is produced to sell - rather the drilling for oil.

They measured the greenhouse gas emissions produced within each equity portfolio (per tonnage) in relation to their annual revenue to demonstrate how much of their return is determined by activities which emit carbon dioxide.

The company with the highest total CO2 footprint per £m holding was Legal and General (LGIM) with 832.70. They invest in Royal Dutch Shell PLC, BP, Exxon Mobil Corp and CRH Plc.

The one with the lowest was Newton Global Equity with 173.54. They also invest in Royal Dutch Shell PLC.

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Active management is when the funds are managed by professional fund managers who look at which companies to invest in or buy and sell different assets on the client’s behalf.

Passive investment funds are where a computer is used to track a market and buy all the assets.

Based on these findings and a review from the fund’s independent advisers, Mercer, the committee agreed to reduce its investment into active UK equities from 46% to 20% and retain the current equity portfolio of 38% passive and 62% active.

Members also approved the balance within the passive portfolio to be 16% global RAFI*, 16% global low carbon and 6% emerging markets.

This, as part of the Fund’s low-carbon mandate, resulted in an estimated decrease in overall carbon exposure of around 3%.

Campaigners say more could be done

But campaigners calling for all fossil fuel investment to be scrapped said after the meeting the committee had "missed an opportunity".

Members of Divest Surrey and Surrey Green Party said the decision did not include any changes in the active fund investment which, they say, accounts for 72% of Surrey’s investments in fossil fuel companies and that moving funds away from these companies would increase the cut in carbon footprint from 3% to 17%.

Cllr Jonathan Essex, of the Green Party, said: “The Pension Fund Committee has made a start on getting out of investments that are carbon heavy. But they could be doing so much more.

“Other local councils – like Monmouthshire County Council – have passed motions to cut ties with the fossil fuel industry.

“After discussing for over a year whether it should divest from fossil fuels, Surrey’s Pension Fund Committee has just voted to reduce its carbon emissions by a paltry 3%.

“Surrey now needs to ratchet up its commitment and shift all its remaining funds to low-carbon investments, alongside ending all its investments in coal, oil and gas companies.

“At the start of the meeting, the committee was told that the Pension Regulator has said now that climate change and associated risks is financially material, so fiduciary duty on this is a sensible course of action. Climate change needs bold action, not baby steps.”